Let’s embrace a better way of building new homes

Looking beyond Brexit, the UK elections and recent international events, it is sobering to think about what the fires happening in Australia and the cost that its environment, wildlife and people are paying. The fortitude of the Australian people is remarkable when you consider that many have seen their houses and communities disappear.

The impact of housing on the environment

As a lender to the residential construction market, this has made us think about the impact housebuilding has on the environment. The Committee on Climate Change estimated that 18% of the UK carbon emissions came from buildings (mostly homes), with a further 15% from electricity consumed by buildings. The UK has a key target of reducing carbon emissions by 80% by 2050 so the Building industry has a role to play in helping meet this target.

Why aren’t more energy-efficient homes being built?

We are seeing some trends emerge: pre-fabrication, modular construction, new materials and some energy-efficient technology, and we are indeed currently funding a modular construction site up in Scotland, but these still are piecemeal. Why?

Cost remains an issue with some of the new technologies and technology itself is evolving rapidly making it difficult to see where standardisation can be achieved to achieve economies of scale. Local councils are very focused on reducing car usage in metropolitan environments but why would they not insist on electric car charging points as part of their planning approvals for example? They also seem to have quietly abandoned sustainability code levels in recent years.

Modular and off-site building methods are problematic for funders simply because the standard control mechanisms used by surveyors and lenders don’t apply in the same way. We mentioned that we are funding a scheme in Scotland – we have been able to get comfortable with a scheme built entirely off-site because the developer controls the process from end-to-end, i.e. they are manufacturing and storing the product in-house.

Our experience with new technologies (as a lender) has been poor to-date, not because the technology doesn’t work, but more because the specialised skills required to implement these techniques are lagging in the UK. The industry seems generally very reluctant to push progress and training in new directions but runs the risk of being leap-frogged by the more visionary ones, as buyers of new homes in both the private and public sectors start demanding higher levels of sustainability.

The cost of using energy-saving technology is coming down rapidly and it would be good to see more use being made of renewable energy systems. Estimates that the cost of achieving carbon-neutral new housing would add 1.5% to 2.5% to the end price tag but this is likely to come down and ought to be cheaper than having to retro-fit technology to houses being built now.

It’s up to all of us accelerate change

So, we could all do our bit to accelerate change as a funder – to be more open-minded about schemes involving new methods, as a consumer – about asking for better, and as a player in the industry – by challenging our borrowers and advisors to aim higher!

By Cécile Verroest, BLG’s Credit/Risk Director and advocate of sustainable living.


“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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